Economy-wide reform and agricultural recovery: Observations of economic Darwinism among transition economies

The fitness of an economy and its prospects for continued prosperity will be measured and determined by its robustness and its ability to adapt to changing circumstances. Some countries in transition are adapting much more easily than others to rapid changes in the orientation of their economy, the common objective of which is to achieve economic growth through the adoption of a range of characteristics generally associated with a market economy. Economic growth does not have to be very fast, but it must be efficient and sustainable. Policy adjustments must address political economy concerns, while seeking to achieve macroeconomic equilibrium and price stabilization, competitiveness, efficiency and flexibility, and the protection of the living standards of the most vulnerable population The process of agricultural sector reform will be determined both by economy-wide policies and sector-specific policies. This paper first outlines a taxonomy of the objectives of agricultural sector reform, and then discusses the way in which indirect price interventions (specifically exchange rate and interest rate policies, expansive fiscal policies and industrial protection policies), influence agricultural growth. Lessons of experience drawn from the UNDP/World Bank Trade Expansion Program structural and sectoral adjustment operations in Poland, and the cases of New Zealand and Chile are employed to illustrate not only the constraints that countries face in this regard, but also in identifying targets for further action. The third section presents what is called the architecture of incentives for agriculture'. In defining a strategy of agricultural sector reform, experience has shown that a structure of incentives can be developed that creates an environment ripe for agricultural growth-incentives relating, for example, to taxation, prices, foreign investment, privatization and demonopolization, decentralization and institutional reform. Special considerations that will require additional attention by policy-makers outside of this structure include the maintenance of GATT-legal principles in trade policies, issues relating to tariffication (including concerns about price risk management, food supply, and the role of food aid), input and credit subsidies as a means to correct for market failures, and the role of regional trading blocks in world trade.     

Dragon Head Enterprises and the State of Agribusiness in China

This paper examines the political trajectory of agribusiness firms called ‘dragon head enterprises’ in China's ongoing agri‐food transformations. It starts from the premise that state and private elites in China are working together to consolidate a robust domestic agribusiness sector, as both an arena for national‐level rural and economic development, and a new frontier for access to resources and markets abroad. Through analyses of policy documents, market share data and ethnographic materials, I explore the organization and operation of dragon heads in the pork sector. My findings reveal that agribusiness development in China's pork sector is largely domestic, has a mixed state–private form and tends to marginalize the foreign‐based TNCs that have been the most powerful actors in the global agri‐food system to date. I argue that China is not only a destination for ‘external’ transnational capital, but also a site of agribusiness development in its own right. This has important implications for analysing capitalist transformations and for engaging global agri‐food politics.     

Policies Supporting Organic Food and Farming in the EU: Assessment and Development by Stakeholders in 11 European Countries

There is no single ‘best way’ of policy development. Bottom-up approaches to policy design and a broad debate among stakeholders facilitate policy learning and innovation. A novel approach of a bottom-up policy design process involving stakeholders is introduced. The first results obtained by implementing this methodology are presented. The outcomes of a large international effort for a development of policies for organic food and farming, which took place in Maj 2004 in Europe, are analyzed: the synthesized results from 11 European countries (AT, CH, CZ, DE, DK, EE, GB, HU, IT, PL, SI) on the current situation of policies related to the organic food market in Europe are highlighted and policy recommendations for the development of the organic food and farming sector are formulated. Specifically, strengths, weaknesses, opportunities, and threats of policies related to the organic food market are identified and policy instruments used to address these aspects are developed.     

Payoffs from research and development along the Australian food value chain: a general equilibrium analysis

The payoffs and distribution of payoffs from research and development (R&D) along the food value chain depend on many interacting economic factors. To quantify these, we have developed a general equilibrium model of the Australian economy with detailed farming, processing and marketing information. We use the model to assess potential payoffs and distributions from various R&D scenarios that lead to demand expansion and productivity improvement. We find that productivity improvement caused by R&D is unambiguously beneficial to the whole economy while the benefits of export or domestic market demand expansion mainly accrue to the primary producers and processing industry, when the economy is at full employment. Also, productivity improvement from R&D on‐farm may benefit processors while improvements postfarm may benefit farmers.     

New plant engineering techniques,R&D investment and international trade

New plant engineering techniques (NPETs) may significantly improve both production and quality of foods. Some consumers and regulators around the world might be reluctant to accept such products and the global market penetration of these products may remain low. We develop a parsimonious economic model for R&D investment in food innovations to identify conditions under which NPET technology emerges in the context of international trade. The framework integrates consumers' willingness to pay (WTP) for the new food, the uncertainty of R&D processes, the associated regulatory cost of approval, and the competition between domestic and foreign products. With generic applicability, the model enables the quantitative analysis of new foods that could be introduced in markets and then traded across borders. We apply the framework to a hypothetical case of apples improved with NPETs. Simulation results suggest that import bans and high values of sunk cost can reduce R&D investment in NPETs to suboptimal levels.     

Marketing Dynamics and Management Excellence: The Sources of Successful Internationalization of a Food Processing Company from a Transition Economy (Case: MASPEX—Poland)

The article presents a case story of the fall and rise of the food industry in Poland's transition economy, illustrated with the example of one of its most successful companies. The author distinguishes 3 stages of the economic transition of Poland: Stage 1, in which the Polish food processing industry collapsed, faced with fierce foreign competition after the implementation of a strategy of liberalization and privatization; Stage 2 (since the late 1990s), when young, dynamic, and relatively well-educated Polish entrepreneurs and managers not only started to regain the local market but also began international expansion, intensifying exports, primarily to EU markets; Stage 3, during which the internationalization took the form of foreign direct investment outward into the former neighboring socialist/communist countries.

The MASPEX Group provides an excellent example of successful revival and expansion achieved thanks to the company's dynamic marketing strategy, executed by a young, dynamic, and highly professional management team.     

Welfare Impacts of Intellectual Property Protection in the Seed Industry

We examine the welfare impact of different intellectual property protection (IPP) regimes in private sector seed research and development (R&D). We take into account the period after expiration of legal IPP, and require simultaneous equilibrium in markets for R&D, seeds, and final product. Optimal IPP is remarkably insensitive to alternative parameterizations, except for R&D productivity. Results suggest that optimal IPP is greater than IPP in the U.S. seed corn market, but lower than the IPP that could be attained with genetic use restriction technologies. Optimal IPP is much higher than IPP achieved under open-pollinated crops or where legal IPP is limited.     

Labor issues and COVID-19

The COVID-19 pandemic has prompted Canada and several other countries to impose an economic shutdown to prevent a deadly public health crisis from becoming much deadlier. In the agriculture and food sector, several hundred thousand restaurant workers have lost their jobs. The rise in unemployment, the closing of restaurants and schools, and social distancing have triggered demand reductions for certain commodities and foods and demand increases for others, bringing along changes in demand for inputs including labor. Canadian employers of temporary foreign workers (TFWs) are facing delays and additional constraints in recruiting, but so have US and European employers of TFWs. Rising food security concerns are making protectionist trade policies popular. Domestic and foreign firms may export less and do more foreign direct investment, inducing trade in jobs.     

Structural Change and Wage Inequality in the Manufacturing Sector: Long Run Evidence from East Asia

This paper analyses the long run determinants of wage inequality in the manufacturing sector for a group of East Asian countries that have experienced rapid structural transformations in recent decades. In line with the skill biased technological change hypothesis, our results show that within manufacturing structural change which fosters the participation of higher skilled workers is a strong determinant of the wage premium. However, the paper also highlights an unusual feature of the East Asian model, showing how well-designed education policies, prudent macroeconomic management and selective policies towards foreign capital can help to buffer the pressure of structural change on wage inequality, even in an open economy context.     

Conditioning trends shaping the agricultural and rural landscape in Africa

African countries continue to face deepening food crises that have been accentuated by the global food, energy, and financial crises. This situation is part of a long‐term structural problem: decades of under‐investments in agricultural sector and poor policies of support for smallholder farmers who form the bulk of the farming population. The inability of these farmers to achieve a supply response when commodity prices were high and market access was less of a problem suggests that there are multiple sets of binding constraints that continue to limit the potential of agricultural growth to reduce food security and poverty on the continent. This article reviews some of the historical trends that have hampered the performance of the agriculture sector. In addition, it reviews the impacts of more positive trends that could stimulate agricultural growth in Africa that could change the African agricultural landscape. The article however warns that there are more recent global developments and some continental challenges that could prevent or slow agricultural growth. These include the global financial crisis, public sector investments, inequities in global agricultural development policies, rush for agricultural lands by foreign investors, domestic commercial financing markets, climate change, and emerging carbon markets. The article argues that while opportunities for accelerated growth exists for African agriculture, new sets of policy instruments will be needed to support smallholder farmers to access new agricultural technologies, finance, reduce impacts of climate change, and adopt sustainable land use practices that can allow them to benefit from emerging global carbon markets.     

Economic thoughts on COVID-19 for Canadian food processors

In this paper, I explore the potential effects of the COVID-19 pandemic on Canadian food processors. First, COVID-19 may have an impact on food processing economic activities because of supply and demand shocks. Second, the impact of COVID-19 on food processing may depend on the type of products and the size of the processors. The effects of measures taken by the government to flatten the epidemiological curve on the economic activities of the food processing sector are uncertain.     

Trade and agroindustrialization in developing countries: trends and policy impacts

There have been important changes in the international trade of processed and high-value added food products from developing countries over the past several decades. One of them has been the emergence of oilseeds and fruits and vegetables, replacing traditional products such as sugar, coffee, and cocoa as the main exports from developing countries. Another trend has been the collapse of African agroindustrial exports and the increase of exports from Asia. The paper highlights key trends, and explores possible reasons for the trends, focusing on trade policies in less-developed countries (LDCs) and developed countries (DCs). The paper argues that national trade policies and other economic policies appear to have been relatively supportive of agroindustrial production and exports in Asia. In contrast, policies have had more mixed effects in Latin America and the Caribbean (LAC), and seem to have been just one component in a larger array of forces inhibiting economic development in Africa. The performance of agroindustrial production and exports from LDCs may be now more dependent than ever on the completion of reforms in the agricultural trade policies of DCs. For Africa, however, a more supportive international environment and better macroeconomic and trade policies will not be enough to ensure a thriving agroindustrial sector within a broader process of economic development until military confrontations stop.     

Sustainable entrepreneurship: regional innovation cultures in the ecological food sector

How do regional innovation cultures in the eco-food sector develop? And how can they be supported and empowered within a national strategy for sustainable agriculture? Based on three case studies, this paper explores key characteristics and dynamics of ongoing regional innovation cultures within the ecological food sector in Norway. The common denominator of each case is a strong community of innovative practitioners that shape their activities around intentional interaction, dialogue and inquiry with a long term commitment. They sustain and develop common tasks by uniting individual commitment to shared questions. Thereby, the intensity and ecology of the shared questions build the carrying capacity and structure of the innovation culture. Each case is unique by being rooted in personal incentives and shared ownership to tasks. Structurally their uniqueness demonstrates three modes of activity and roots of identity, related to the three concepts of institutional entrepreneurship, market entrepreneurship and cultural entrepreneurship. Four implications are finally drawn for regional innovation strategies within the eco-food sector: (1) build strategies on the activity of pioneering local/regional cultures of practice; (2) analyse their entrepreneurial uniqueness and social ecology; (3) facilitate a broader entwining of institutional, market and cultural entrepreneurship; and (4) develop competency and cultures of inquiry linked to entwined entrepreneurship. A corresponding research strategy should acknowledge, build on and strengthen the culture of inquiry embedded in the regional communities of practice.     

MORE ON WELFARE GAINS TO DEVELOPING COUNTRIES FROM LIBERALIZING WORLD FOOD TRADE

The common presumption that food-importing developing countries would be harmed by a liberalization of world food trade is questioned in this paper. Both theory and new empirical modelling evidence suggest the possibility of the opposite conclusion. Even if just advanced industrial countries were to liberalize their food trade, the present empirical analysis (using a model of world food markets) suggests that economic welfare and net foreign exchange earnings from food trade could improve for the vast majority of developing countries. The extent to which that gain would be greater if developing countries also were to liberalize their policies affecting food markets is shown as well. The analysis helps to reconcile differences between previous results using partial-equilibrium models and those derived from computable general equilibrium models.     

Rational But Poor? An Explanation for Rural Economic Livelihood Strategy

Using panel data for six rural sub‐Saharan Africa countries, this article tests two hypotheses: (i) household‐specific staple food price bands resulting from market failures in the presence of liquidity constraints and rainfed agriculture induces rural household specialisation in food crops as an economic livelihood strategy; (ii) specialisation in food crops yields inferior welfare than diversification, and keeps households trapped in poverty. The results lend strong support to both hypotheses, reinforcing the need for public investment in rural infrastructure in order to encourage household livelihood diversification for improved welfare.     

The Spanish path of agrarian change, 1950–2005: From authoritarian to export‐oriented productivism

The aim of this study is to determine whether the evolution of Spain's agrarian change, between 1950 and 2005, exhibits any features important enough to differentiate it from the common model of developed countries in Western Europe. On the one hand, the Spanish agrarian transformations share the main features of the changes in Western Europe: technological innovation, increased production and productivity, the diminishing importance of the agricultural sector, close integration with the industrial sector, and a high environmental impact. On the other hand, a series of important peculiarities can be observed in Spain's agrarian change: strong expansion of intensive livestock farming; the role of increased irrigation in explaining the transformation of agriculture; policies that offered very little support to the agricultural sector under a dictatorship that denied a voice to farmers; and the prominent role of agriculture in the economy despite its small contribution to GDP.     

The Effect of Stricter Foreign Regulations on Food Safety Levels in Developing Countries: A Study of Brazil

More stringent national-level food safety standards adopted by developed countries have sent firms and governments among their lesser-developed trading partners scrambling to adopt the required measures or risk losing important export markets. Here we address whether stricter product safety standards in importing countries affect safety levels for the same products in the domestic markets of the countries that export to them. We present a case study, using national data and firm-level surveys, that examines the impacts of foreign requirements that processors adopt Hazard Analysis and Critical Control Point (HACCP) systems on the level of safety offered in the domestic market by Brazilian processors of fishery products. This study shows that to date in Brazil the adoption of HACCP systems has been concentrated in the export sector, with only small impacts on domestic standards and food safety levels.     

新形势下食品企业经济管理的市场竞争力优化与对策分析

社会主义市场经济体制的确立,激活了我国企业的发展活力,逐步形成了以市场为导向的企业竞争模式.但是新形势下市场经济政策的变化,改变了企业参与市场的方式,由之前的劳动力为主转变为新思维、新理念为主,价值市场竞争日益激烈也导致传统的经济管理模式已经不能适应企业创新经营与发展的需求.在这种背景下,以食品企业为代表的传统企业应综...     

Water Use in the Canadian Food Processing Industry

A number of studies have examined water use at the farm level, but water use by food processing firms has received relatively little attention. In light of current concerns regarding water conservation, the objective of this paper is to bridge this gap in our understanding of water use in the agri-food sector. Four aspects of water use (intake, treatment prior to use, recirculation and discharge) are examined for the Canadian food processing industry and three of its subsectors. Price and output elasticities are estimated using plant-evel data from a 1991 survey of water-using firms. Results indicate that all aspects of water use are sensitive to economic factors. Implications for government policies are identified.     

Modeling agricultural innovation in a rapidly developing country: the case of Chinese pesticide industry

Technology and innovation play an increasingly important role in the economic development of both developed and developing countries. We investigate how policy and market factors influence firms’ (or other potential inventors’) decisions on innovation or imitation by developing a model that emphasizes expected market size, appropriability and technological opportunity. We empirically test the model using provincial pesticide innovation data from a rapidly developing country, China. We find that the government encouraged local innovation by opening regions to more international trade, by increasing investments in public research and education, and by strengthening intellectual property right (IPR) enforcement to meet its WTO TRIPS obligations. Moreover, while IPR enforcement and increases in market size are important in encouraging innovation, empirical evidence is mixed as inventors respond to these factors differently. Policies to increase expected market size could increase copying rather than inducing R&D investments, and extended patent life may reinforce the original standing of infringers as well as inventors.